What are Capital Assets? – Section 2(14)
Do you know everyone is surrounded by capital assets; the only thing is we need to identify them? Don’t worry take a deep breath, look around, the place where you are sitting right now, and reading this article can also be your capital asset. In simple words your house, building, land, or any other property whether it is your personal or related to your business activity. All these assets are termed as capital assets.
However, some assets are specifically are excluded from the definition of the word “Capital assets” such as:
Stock-in-trade, Furniture or car held for personal use, gold bonds etc.
According to section 2(14), a capital asset means-
- Property of any kind held by an assessee, whether or not connected with his business or profession;
- Any securities held by a foreign institutional investor who has invested in such securities in accordance with the SEBI regulations.
From the above table it is seen that Jewelry is included under capital assets, the detail of which is as under:
- It includes ornaments made of gold, silver, platinum or any other precious metal, or any alloy containing precious metal.
- Also, some precious or semi-precious stones are also included.
Now you might be thinking that why stock-in-trade is not included?
The answer to your question is here:
Let’s say a person has a business of garments. So, the stock held by him for the purpose of sale will be his stock-in-trade. After his sale, he will earn some profit. But this profit will not come under capital gain as it is his business income and can only be taxed under Profits & Gains from Business & Profession.
Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.